BERLIN (Reuters) - Chancellor Angela Merkel has proposed a China-European Union summit during Germany's 2020 EU presidency that would include national leaders of EU countries as well as officials from Brussels and Beijing, EU diplomats said.

The summit, which is likely to coincide with China's displacement of the United States as the EU's largest trade partner, would aim to counter what Berlin sees as Beijing's divide-and-rule approach to dealing with the bloc.

Projects like the Belt-and-Road debt-for-development initiative has made China an influential player in poorer eastern EU members like Hungary and Greece.

But Germany and China are on the same side in the trade disputes that are dividing the West, with both manufacturing export powerhouses vulnerable to protectionist measures favoured by U.S. President Donald Trump.

"Germany should make China an important theme of its EU council presidency in 2020," said Hubert Lienhard, head of the German parliamentary Asia-Pacific committee.

Germany takes over the rotating six-month presidency in the second half of 2020.

Many have questioned whether Merkel's conservative-Social Democrat coalition will survive until then. She has already resigned the leadership of her Christian Democrat (CDU) party and said she will not run again for Chancellor.

Assuming Britain leaves as scheduled in March, the EU will then have 27 member states whose leaders could attend the summit. Previous EU-China summits have tended to involve only the EU's own leaders and Chinese representatives.